# Statistics

## From Casino Games to Medical Trials: The Real-World Applications of the Central Limit Theorem

Statistics is a branch of mathematics that deals with the collection, analysis, interpretation, and presentation of data. The Central Limit Theorem (CLT) is a fundamental concept in statistics that underpins many statistical methods and analyses. It is a powerful tool for analyzing large datasets and predicting outcomes based on limited information. The CLT states that …

## 50 Years of Progress: A Look Back at the Most Groundbreaking Statistical Advances

In the last 50 years, there has been a rapid growth in the field of statistics and its applications, which has led to a vast array of groundbreaking statistical advances. These advances have had a profound impact on many aspects of modern society, including business, healthcare, science, technology, and policy. In this post, we will …

## Exploring the Effectiveness of Imbalanced Data Correction Methods in Mixed Linear Regression Models

Introduction In recent years, the amount of data collected in various fields has grown rapidly, and machine learning algorithms have become increasingly popular for analyzing such data. However, a common issue faced when working with large datasets is class imbalance, where one class in the target variable is greatly outnumbered by the other. This imbalance …

## From Outliers to Inliers: Robust Non-Parametric Regression with Median-of-Means

Regression analysis is a widely used statistical tool for predicting a continuous dependent variable based on one or more independent variables. However, traditional regression methods, such as linear and polynomial regression, can be sensitive to outliers and make incorrect predictions if the assumptions of normality and homoscedasticity are violated. To address these limitations, researchers have …

## Optimizing the Accuracy of Time Series Predictions: An Introduction to the Forward-Backward Algorithm

Introduction In today’s fast-paced world, businesses, industries, and organizations rely heavily on data-driven decision making. The ability to predict future trends and patterns in data can be incredibly valuable for forecasting and planning. One of the most important areas of data analysis is time series analysis, which involves studying and understanding sequential data over time. …

## Assessing Sovereign Risk in the Age of Deep Learning

Introduction Sovereign risk assessment is a critical component of modern finance, as it helps investors, analysts, and policy makers understand the potential risks and returns of investing in a particular country. In the past, sovereign risk assessment has been based on traditional methods such as credit ratings, macroeconomic indicators, and political risk analysis. However, with …

## Dynamic Factor Analysis vs Traditional Methods: Comparing the Accuracy of Inflation Forecasting

Introduction Inflation forecasting is a crucial task for policymakers and central banks as it helps in determining the appropriate monetary policy. The accuracy of inflation forecasting is of paramount importance, as it directly impacts the economy. In this blog post, we will compare the accuracy of dynamic factor analysis (DFA) and traditional methods in forecasting …

## Multiple Hypothesis Testing: How to Balance Power and False Positive Rate

Introduction In the field of statistical analysis, multiple hypothesis testing is a common problem that arises when a researcher conducts multiple experiments or tests simultaneously. The problem arises because the more hypotheses that are tested, the higher the probability of obtaining a false positive result. In this blog post, we will discuss the concept of …

## Multiple Imputation for Propensity Score Analysis with Covariates Missing at Random

Introduction Missing data is a common problem in statistical analysis, and can lead to biased or inefficient estimates if not handled properly. One method for dealing with missing data is multiple imputation, which involves creating multiple plausible values for the missing data and analyzing each imputed dataset separately, before combining the results. In this blog …

## The Power of Bayesian Methods in Housing Investment Forecasting: A Look at BVARS and FAVARS

In recent years, Bayesian methods have gained popularity in the field of housing investment forecasting. These methods, which are based on Bayes’ theorem, allow for the incorporation of prior knowledge and uncertain parameters in the forecasting process. Two specific methods that have been widely used in this context are Bayesian Vector Autoregression (BVAR) and Factor-augmented …